Municipalities cling onto their cash reserves

The Finance Ministry has issued a circular calling on all general government entities to transfer their cash reserves - currently sitting in bank accounts - to the country's central bank, which has generated concerns among local authorities. Commercial lenders are also worried about the loss of deposits.

It is estimated that the total amount that should be transferred to the Bank of Greece by September 29, according to the circular by the General Secretary for Fiscal Policy Frangkiskos Koutentakis, is between 3 and 4 billion euros.

The transfer is compulsory per the law cited by the circular dated September 13, including a legislative act issued in April 2015 when the state coffers had emptied as a result of the negotiations led by then finance minister Yanis Varoufakis. The state had then appropriated entities' reserves to meet its basic obligations. The transfer is...